China will not use its near-global monopoly on the rare earths trade as a "bargaining tool", an Industry ministry spokesman said today, amid a row with Japan over the vital minerals.

China will not use its near-global monopoly on the rare earths trade as a "bargaining tool", an Industry ministry spokesman said on Thursday, amid a row with Japan over the vital minerals.

The comments came as the Japanese media reported that China had cancelled a meeting of the economic ministers of Japan, China and South Korea due to the spat over its export restrictions on rare earths.

"China will not use rare earths as a bargaining tool," Zhu Hongren, the spokesman for the country's ministry of industry and information technology, told a press conference, according to an official transcript.

"China hopes to have mutually beneficial cooperation with other countries on the use of rare earths and at the same time protect the unrenewable resource," he added

Last year China produced 97 per cent of the global supply of rare earths - a group of 17 elements used in high-tech products ranging from flat-screen televisions to iPods to hybrid cars.

The world's top consumers of rare earths, especially Japan, have rung the alarm bell in recent weeks, accusing China of disrupting exports of the vital minerals - a charge Beijing has repeatedly denied.

Shipments have nevertheless been disrupted, and a top official in Tokyo has warned that Japan's stockpile could run out by March. Japan and Vietnam are therefore set to sign a deal on joint development of rare earth reserves.

Hongren said that China had the right to impose restrictions on the mining, production and trade in the minerals, as a means to tackle pollution in what is an environmentally unfriendly industry.

"China's rare earth production and exports should take into account not only economic development, but also a number of factors including protecting the environment and resources," he said.

Claiming that the country's moves in this regard were "in line with World Trade Organisation rules," Hongren stood firmly by China's stance.